I Lost My First Home to Foreclosure, Then Bought my Next Home in Cash!

When your finances are not where you want them to be, it can be hard to visualize a happy ending. But a happy ending is possible. Here’s my story and the important lessons I learned along the way. I hope they help to inspire you to keep going…

Four years ago, I began dating my now-husband, Superman. We’d been friends previously, so I already knew he was “the one.” Although I loved to travel, Superman wasn’t the biggest fan because of past experiences. It took a full year of watching me fly around the world before he asked to join in.

I suggested that we start saving for travel together and begin automating our savings so we could quickly take advantage of any deals that popped up. What he didn’t know was our travel accounts were a practice run for our future wedding fund. 🙂A couple years went by, and Superman became a saving pro. He popped the question with a ring he paid for in full with some of the money he’d saved (success!).

We then decided to take our savings up a notch, and chose not to have a big wedding. I hate planning events and secretly I don’t like being the center of attention unless it’s as The Budgetnista. So Superman and I paid for our small wedding in cash, $2,700. That included everything, my dress, his clothes, our reception, our cake (cupcakes), everything! By this time, our now-joint savings account was super healthy. We still traveled, had date nights and enjoyed life, but now we had a bigger goal in mind…homeownership.

First, we created a joint budget. We decided that we would live off of Superman’s income and save and invest mine. All last year we prepared to buy a home. We found a real estate agent, raised our credit score, paid off debt, got pre-approved for a mortgage and spent hours online and in-person looking for the perfect house.

Sidenote: Beyond your credit score, it’s important to note that your debt-to-income ratio can be just as important if you’re financing a major expense like a home. Make sure to keep a close eye on both if you’re considering making a big purchase like this.

Debt-to-income ratio aka your DTI, is a calculation that determines how much debt you have vs. your income. It’s super important when you need to borrow money. Most lenders use your DTI as one of the factors to decide if you’re someone they trust to lend money to and then determine the maximum amount you could borrow based upon the other lenders you owe.

Here’s an awesome new (and free!) tool from Intuit called Turbo that will help you monitor both numbers. Combined with your verified IRS-filed income, Turbo will show you how you’re doing compared to others like you and give you personalized tips on how to get where you want to go.

These three key numbers: income, credit score, and debt-to-income ratio help you to understand how lenders may view you. (There are various types of credit scores, and lenders use a variety of scores to make lending decisions. The credit score provided by Turbo may not be the specific credit score used by your lender.)http://intuit.me/2Fd6VCu

It’s an easy way to find out where you stand so you can feel prepared before taking a big leap like this.

Back to our home buying journey…

Unfortunately, we chose to buy in a seller’s market. Not enough homes and too many buyers. Over and over we’d fall in love with a home, put an offer in and lose out to someone that put in a higher and stronger offer.Then a few months ago, we got a lucky break. Our realtor found a foreclosure that had not been made public yet. The one issue was, only cash offers were being accepted. The bank was asking for $185,000.It took us a few nervous days of doing our budget over and over, but we knew we had enough cash and that our lifestyle would allow us to buy the home while still maintaining our other financial responsibilities. We made an offer of $180,000 and it was accepted! Woot Woot!. $5,000 less than asking. During the process, our realtor showed us the value of our 5 bedroom, 3.5 bathroom home via the comparable homes in the area. Our house was worth $370,000! We more than doubled our money with one purchase!

There are so many lessons that our homeownership journey taught me. Here are some of them.

Prepare for future dreams before you even know what they are.

A budget is not constricting, it gives you the freedom to strategically plan for your goals.

While it was definitely a journey, and one that took a lot of planning, support, and preparation along the way, I’m so glad that we ended up where we are now.

Can we have some #RealMoneyTalk? There were so many amazing folks that joined me and Superman on this adventure. I’m sure you’ve seen me on social or heard me talk about our journey on my podcast over and over.There is something powerful about sharing your process. It holds you accountable and means you’ll have some cheerleaders rooting for you along the way. Where are you on your financial journey? What are you working towards?

Share with me and Turbo using #RealMoneyTalk. Don’t forget to get your debt-to-income ratio and credit score for free. You’ll likely need it to help you complete your next big financial goals. 🙂 Download it here: http://bit.ly/2FBjwgP

My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective of her. Before I share any product or service with you, it must pass my Lisa Rule.

What’s the Lisa Rule? Lisa is a Dream Catcher and follows the advice I give here as well. If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisas. I feel protective of you and your financial journey.

TURBO passes my Lisa Rule. Yes, I am a paid partner of TURBO’s, but I would not recommend a product or service that I didn’t believe was helpful and useful.

This is a sponsored conversation written by me on behalf of Turbo. The opinions and text are all mine.

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If this article helped you, it will probably help another sis-star you know. Share it!

Camille

I am wondering where you guys live noting your low housing cost purchase. I am also wondering if you share tips for folks living in big cities on home buying where the prices are about triple the cost of your house worth. Thanks so much!!

We live in Newark, NJ. No matter where you live, the 3 most important numbers for home buying are: income (lenders don’t want your mortgage to be more than 30% of your income, debt-to income ratio, and your credit score.

Work on these 3 numbers if you want to buy a home. Your income & DTI ratio let them know you can afford the home. Your credit score shows you make a habit of making on time payments.

Jamala Kim Wallace

Shot out to you!! Newark is my home town.. and I love coming there to visit.

Amoi

What are you guys planning to do with your 2nd home? Are you selling? Flipping? Moving in and renting out your old one? Just curious.

This information was very helpful..I don’t know if you’ve ever covered this in past blogs or in your books, the only one I have so far is the one for Credit, but do you have any advice or have done a blog on co-mingling finances and budgeting with your significant other?

This is fantastic.. congrats.. it’s so funny because I convinced my son (24yrs old) to buy a house for 8,000.00.. he spent 3500.00 to revamp it and it’s now his rental income.. earning him an additional 8,000.00 yearly income. It can be done. … he’s ready to buy another.

I wish you and superman could be mentors for my fiance and i. We come from familys where money management is a kept secret. Even talking aloud about money is considered disrespectful. We could really use your guidence. Yes i am a dream catcher and i am a lil lost.- Regina H.

Malik Lomax

Hello, Great review! My husband and I are looking to buy our first home, a new car and start up a good family business. I own a small business income. We both wanted to get a home so desperately but got denied twice because of our poor credit score and bad credit history. My uncle who is a loan officer introduced me to A credit specialist, he fixed our score to 792 in just few days and up till date we are up in the high 700 credit score family. I just have to do this to express our gratitude for his skills and diligent service. You can get to him via his email (globaltechnologies46 At G mail Dot Com). He is an expert when dealing with credit score raise, removal of negative items on reports and posting tradelines on report as well.